For example, if a state had a 50/50 recovery split without a qualifying state False Claims Act, the split would be 40/60 if the state had a qualifying state False Claims Act.  

In the real world, that works out to be a 20 percent increase in Medicaid award money returned to the state (i.e. an increase of 10 percentage points on a base of 50 percentage points).  Most states will get more than this; no state will get less, provided they have a qualifying state False Claims Act.

To give an example:   In the recent Serono settlement, New York state recovered $80 million.  If New York had a qualifying False Claims Act, however, it would have gotten $96 million -- an additional $16 million to be used for health care services for the needy. That $16 million is a 20 percent increase over the original $80 million.

Appended below is a table that shows the Federal / State Medicaid cost sharing splits by state.  Note that these matching rates are for FY 2007, and illustrative.  For data on different years, click here.

Federal/State Medicaid cost sharing splits shift a bit from year to year, and the actual percentage going back to a state in any given case will have to be calculated based on the time frame covered by the False Claims Act settlement or judgment.

For a state law to qualify for an increased award in Medicaid False Claims Act recovery cases, the state law should be at least as tough as the Federal statute.  The Inspector General of the U.S. Department of Health and Human Services (OIG) will be judging the eligibility of each state, based  on four key aspects of their False Claims Act law: 
 

1) Definition of a false claims and establishment of liability:  Does the law establish liability to the State for false or fraudulent claims described in section 3729 of title 31, United States Code, with respect to any expenditure described in section 1903(a);

2) As effective in encouraging and rewarding whistleblowers:  Does the state law contain provisions that are at least as effective in rewarding and facilitating qui tam actions for false or fraudulent claims as those described in sections 3730 through 3732 of title 31, United States Code;

3) The seal:  Does the state law contain a requirement for filing an action under seal for 60 days with review by the State Attorney General, and;

4) Adequate penalties:  Does the state law contains a civil penalty that is not less than the amount of the civil penalty authorized under section 3729 of title 31, United States Code?
 

Any state interested in passing a state False Claims Act would do well to adhere, as closely as possible, to the Federal statute.